What’s ahead for oil prices? 2008 versus 2014

The recent drop in oil prices bears similarities to the tremendous drop of 2008, possibly foreshadowing what’s to come in the new year.

Let’s have a look back at the performance of crude oil in 2008:

Oil started the year around $100/bbl and quickly shot up to nearly $150 by June. The price then declined by over $110 and by December, WTI crude oil finished near $35/bbl.

Although not as drastic, this year’s price drop is extraordinarily similar in terms of timing and suddenness:

Once again, oil started this year around $100/bbl. Although it lacked the significant price increase seen in early 2008, this year’s oil decline began almost at the same mid-way point of the year. 2014 ended with WTI down 48% to just above $50/bbl.

In 2009, however, the price rose nearly 100% to approximately $73/bbl. And although there were no geopolitical factors creating a supply glut, the world economy was tumultuous at best. Something to think about for 2015.